Stocks dipped lower on Wednesday after October's consumer price index reading showed the largest annual jump in the cost of goods in more than 30 years. All market benchmarks ended the session in the red, with both the Dow Jones Industrial Average and Nasdaq falling over 240 points each.
Following the latest consumer price data, traders moved up their expectations for the first upcoming Federal Reserve interest rate hike. Analysts now see greater odds of the central bank's first full rate hike to come in July 2022, according to CNBC, earlier than prior estimates for September.
Here's how the market settled on Wednesday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
Consumer prices surge higher in October:
The Bureau of Labor Statistics' Consumer Price Index (CPI) increased by a much larger-than-expected margin in October both over the prior month and last year, as inflationary pressures continue to weigh on the U.S. economy as it works to recover from the pandemic's financial impact.
The CPI rose 0.9% in October over September, according to the report published Wednesday, accelerating from September's 0.4% monthly rise. Over last year, the CPI jumped 6.2%, or by the most since 1990.
A major driver behind the CPI rise was climbing energy costs, with energy prices up 4.8% month-on-month, and fuel prices alone up 12.3%. Grocery prices also increased, rising by 1.0%, while used car and truck prices gained by 2.5%.
Excluding volatile food and energy prices, core CPI was up by 0.6% month-over-month in October, or three times September's climb of 0.2%. Compared to last year, core CPU rose by 4.6%, or by the most since 1991.
President Joe Biden told reporters on Wednesday that he is committed to combating the rising cost of goods following the report.
"Inflation hurts Americans' pocketbooks, and reversing this trend is a top priority for me," Biden said in a statement following the report's release.
"The largest share of the increase in prices in this report is due to rising energy costs--and in the few days since the data for this report were collected, the price of natural gas has fallen," Biden added. "I have directed my National Economic Council to pursue means to try to further reduce these costs, and have asked the Federal Trade commission to strike back at any market manipulation or price gouging in this sector."
Here's how market benchmarks started trading soon after opening bell:
S&P 500 Index: -0.34% or -15.96 points to 4,669.29
Dow Jones Industrial Average: -0.04% or -14.77 points to 36,305.21
Nasdaq Composite Index: -1.05% or -166.25 points to 15,720.30
